8 Reasons to Register Your Trademarks in China

Spring is coming to an end, but it’s not too late to conduct a little spring cleaning. First on the list: get your IP in order and register your trademarks in China. The following are 8 reasons to do so.

1. Because you are having branded goods manufactured in China, and don’t want them seized for trademark infringement. China is a first-to-file jurisdiction for trademarks and this means that if you don’t register your trademark, someone else could and probably will. Trademark squatters with particularly bad intent will register the trademarks of foreign companies manufacturing goods in China, and then hold those companies for ransom by threatening to seize their goods for trademark infringement. Export-only manufacturing in China generally constitutes infringing trademark use and so even if you are just manufacturing your product in China for sale elsewhere, failing to register your trademark used on that product puts you at great risk of losing your brand name or your logo to someone else in China and not being able to continue having your product made in China. Why expose yourself to that kind of risk?

2. Because you want to take down infringing listings on Chinese e-commerce sites. If you only have a trademark registration in the US or EU or some other jurisdiction outside China, you should be able to submit takedown requests to foreign-facing sites like Alibaba. But to remove listings from domestic Chinese e-commerce sites like Taobao and 1688.com you almost always need a Chinese trademark registration. Many other e-commerce or social networking sites require a Chinese trademark registration and every site will take action more quickly with one. Do you really want to spend your time arguing with DHgate’s customer service representatives? Do you really want to take the risk of having someone selling products with your name on them all around the world (or even just in China)?

3. Because you want to enter into a licensing agreement with a Chinese distributor. If you are going to license your products to a Chinese distributor and those products will be sold in China under the same brand name, then you need to own that brand name in China. You can’t license something you don’t own. A good Chinese distributor will insist that you register the trademark first; a less experienced (or shady) distributor might register your trademark “on your behalf” without telling you.

5. Because you want to have counterfeit goods seized by Chinese Customs. With few exceptions, a foreign trademark has no relevance in China. It certainly means nothing to Chinese Customs. Would U.S. Customs and Border Patrol seize goods based on a Chinese trademark registration? Not a chance. And the only way to have Chinese Customs seize infringing goods is to first have a Chinese trademark registration, and then register that trademark again with Chinese customs.

6. Because you want to file a lawsuit in China against notorious counterfeiters. This seems obvious but is sometimes overlooked. You do not have any trademark rights in China unless you have registered your trademark in China. If you attempt to file a lawsuit in China for trademark infringement without actually owning the trademark in China that is allegedly being infringed, you will be laughed out of court. You would be surprised (or maybe you wouldn’t) how often our China IP lawyers are asked to sue a Chinese company for trademark infringement, only to discover that the company that engaged us has no China trademark and hence no basis for a claim of infringement.

7. Because even though you’re not selling goods in China, you might want to someday. It’s no mystery that China is the biggest market in the world, with monstrous buying power and a rapidly growing consumer class. It’s the rare company that can say it is categorically uninterested in selling to China for the foreseeable future. Currently it takes at least a year from the trademark application date to the registration date, and that assumes everything goes smoothly. Having a trademark registration in hand will make it that much easier for you to enter the Chinese market.

8. Because you want to make your company a more attractive buyout target. This goes hand in hand with the above reason. The annals of history are rife with tales of companies who found out too late that a trademark squatter had already registered their trademark in China. Don’t be that company. A company that has its IP all zipped up will always be more attractive as a buyout target. We have represented many a smart company that registers trademarks in China for no other reason than to increase its value to investors.

About China Law Blog

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.